Suit in Failure of S&L; With Ties to Neil Bush Settled : Thrift: A $49.5-million pact is reached in Silverado Banking, Savings & Loan case.

DENVER — Lawyers have reached a $49.5-million agreement to settle the government’s $200-million lawsuit against Neil Bush and 12 other former directors of Silverado Banking, Savings & Loan, a government official said Wednesday.

Chief U.S. District Judge Sherman Finesilver issued an order late Wednesday announcing the settlement. His order said that details of the agreement in principle will be filed by 2 p.m. Friday and that final settlement documents are due June 12. He said he will not yet vacate the Oct. 7 trial date he has scheduled.

The Federal Deposit Insurance Corp. sued Bush, son of President Bush, and 12 other former Silverado directors last September, alleging that they were grossly negligent. Federal regulators seized the thrift in 1988. It has been estimated that the Silverado collapse will cost taxpayers about $1 billion.

Alan Whitney, a spokesman for the FDIC in Washington, said the settlement calls for the defendants to pay the FDIC $26.5 million. In addition, he said the FDIC will take over the $23-million Silverado Indemnity Fund, giving the government nearly $50 million, about a quarter of what it had sought.

“We think it’s a fair and reasonable settlement,” Whitney said.

James Nesland, a Denver attorney representing Neil Bush in the lawsuit, said, “I think my client’s relieved that the matter is settled.”

Other lawyers involved in the massive lawsuit either could not be reached by telephone for comment or would not comment.

After the lawsuit was first filed, all of the defendants denied the allegations, with some contending that the thrift’s failure was caused by outside experts and government regulators who served as Silverado advisers.

Settlement discussions began April 15 with Denver U.S. Magistrate Donald Abram serving as settlement master. Tuesday was scheduled to be the last day formal negotiations were to be held in the lawsuit.

In his order Wednesday, Finesilver summed up the intensive negotiations that have taken place over the past six weeks.

“Settlement discussions have been protracted and intense and on numerous occasions have been around the clock,” he wrote. “Attorneys have traveled frequently from Denver to Washington and New York in an untiring effort to resolve the matter well ahead of trial.

“The court notes that allegations in the complaint did in fact present difficult and novel legal issues in a complex and changing legal environment. The dynamics of this type of litigation is still unfolding, and settlement dialogue recognizes the uncertainties of result and inevitability of endless appeals.

“The court commends the efforts of all counsel and the litigants in bringing about a just result at this relatively early stage of litigation.”

In addition to Neil Bush, defendants in the case include Michael Wise, former Silverado chairman; Bob Lewis, former chief financial officer; Richard Vandapool, former chief operating officer, and the Denver law firm of Sherman & Howard.